The dirty secret about AI in the office that has CEOs admitting millions of white-collar jobs will be replaced

Yahoo

4 days ago

The worst kept secret in the world of artificial intelligence is that yes, AI is coming for people's jobs.
Warnings have been sounded over the last year that coders, writers and digital designers are at risk from new generative AI models like ChatGPT, Copilot and a slew of AI-powered productivity tools, and will likely become more common as entrepreneurs and deep-pocketed investors continue to pour money into the tools.
Now, middle managers may be on the chopping block, according to recent reports, and some CEOs are warning that millions of white-collar workers may be facing job oblivion sooner than later.
Middle managers — often the butt of cubicle humor, but an inevitable stop on the career ladder for aspirant executives — have been disappearing for the last half decade.
According to a new analysis from Gusto, which handles payroll for small and medium-sized companies, middle managers now oversee double the number of workers they did just five years ago.
White collar jobs are disappearing due to AI — even if many people are in denial of its impact (Getty/iStock)
In the world of Big Tech, the trend toward fewer managers has been called the "Great Flattening," according to Axios. While it's unclear if AI products are actually replacing these managers, there is indication that the reductions provide savings that companies can then pour into AI tools and products.
Earlier this year, Microsoft announced that it will lay off 9,000 employees — including managers — as it ramps up its AI strategy and development goals.
And Microsoft isn't the only company cutting down on managers — Amazon released a memo last year announcing it planned to reduce its number of managers, and Google said it planned to cut vice president and manager roles by 10 percent last year, according to Business Insider. Meta has been working on reducing its managers since its 2023 "year of efficiency."
AI tools will likely help drive further flattening efforts.
According to an Axios report, managers have been increasingly turning to AI to help automate their tasks. This frees up their time, and communicates to CEOs that fewer are needed to manage their workers.
The report, citing a recent study from Resume Builder, found that managers are using AI tools to make decisions about hiring, firing, promotions, and raises.
Despite the presumed increase in productivity that AI tools promise, Gusto warned that — at least for now — industries that employed more human managers had better productivity, according to its analysis.
But that may be a temporary hiccup as businesses adjust to the new AI-tinged world of work.
Companies are hiring fewer middle managers and recent graduates are having a difficult time finding entry-level white collar jobs. Artificial Intelligence may be worsening both trends (Getty/iStock)
Ford's CEO, Jim Farley, warned during the Aspen Ideas Festival last week that AI will eliminate half of the white collar jobs in the U.S.
He's not the only CEO predicting an apocalypse for office workers; last month, Amazon CEO Andy Jassy said that the shipping giant would shrink its corporate work force over the next few years as a direct result of AI tech adoption.
'We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,' Jassy wrote in a memo send to employees last month. 'It's hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.'
Dario Amodei, the CEO of AI startup Anthropic, said in May that AI tech could destroy half of all entry-level white collar jobs and increase the unemployment rate to as high as 20 percent in the next five years. As of June, the jobless rate was at 4.1 percent.
Entry level and middle manger positions in white collar jobs are often stepping stones that workers take toward higher wages and better job security.
Aneesh Raman, the chief economic opportunity officer at LinkedIn, published a New York Times op-ed in May warning that AI is threatening to break the "bottom rung of the career ladder."
"In tech, advanced coding tools are creeping into the tasks of writing simple code and debugging — the ways junior developers gain experience. In law firms, junior paralegals and first-year associates who once cut their teeth on document review are handing weeks of work over to A.I. tools to complete in a matter of hours," he wrote. "And across retailers, A.I. chatbots and automated customer service tools are taking on duties once assigned to young associates."
Making it more difficult for workers to enter into the job market and rise into management positions in their companies can, according to Raman, "slow down workers' careers for decades."
Raman noted that, citing data from the Center for American Progress, young adults who experience six months of unemployment at age 22 are likely to earn $22,000 less than their employed peers over the following decade.
The view that AI will eat up opportunities for younger workers is not uncontested. In June, Brad Lightcap, the CEOO of OpenAI, told the New York Times that younger workers were more likely to adapt to AI and benefit from it, and that the technology instead might be a hurdle for "a class of worker that I think is more tenured, is more oriented toward a routine in a certain way of doing things."
In other words, older workers.
Danielle Li, an economist at MIT who studies the use of AI in the workplace, shared the view that more experienced workers were more likely to face hardships due to AI, but not for the same reasons as Brightcap. She told the New York Times that AI's democratizing of specialized skill may make it easier for companies to lay off or stop hiring workers who've spent their careers specializing.
For example, she foresees a world where, thanks to AI tools, someone employed as a software engineer may no longer need a background in coding to hold that job, or law school to effectively write a legal brief.
Artificial intelligence has incredible potential for medicine and other industries — but it will destroy likely millions of jobs (Getty/iStock)
'That state of the world is not good for experienced workers,' she said. 'You're being paid for the rarity of your skill, and what happens is that A.I. allows the skill to live outside of people.'
But where Brightcap saw opportunities for young workers, Li sees potential difficulty.
She believes that a recent increase in unemployment for new college graduates is due, in part, to employers' expectations that AI will allow them to do more with fewer workers. Struggling to get started — as Raman pointed out in his op-ed — can cost new workers tens of thousands in potential earnings.
A tide of unemployed white collar workers has, thus far, been staved off by a slow but increasing adoption rate for AI tools in the workplace.
According to a the U.S. Census Bureau's Business Trends and Outlook Survey, business usage for AI has more than doubled from 3.7 percent to 9.2 percent since the Census Bureau began collecting the data in 2023.
Projected AI usage — which companies plan to adopt and integrate the technology — has also nearly doubled, from 6.3 percent of the respondents to 11.6 percent.
The trends are clearly moving toward adoption, but the overall number of companies using AI tech to produce goods or services is relatively low, at least for the time being.
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